Home Business News Labour welcomes tax cuts, but ‘where is the money going to come from?’ as there is ‘no headroom’

Labour welcomes tax cuts, but ‘where is the money going to come from?’ as there is ‘no headroom’

by LLB Finance Reporter
20th Nov 23 7:12 am

Speaking to Sky News’ Sunday Morning with Trevor Phillips, Labour’s shadow chancellor Rachel Reeves said that she would welcomes tax cuts for working people, but has asked the government to “explain where the money is going to come from.”

She added, “Last year when the Conservatives had a load of unfunded tax cuts, it crashed the economy [and] sent mortgage rates soaring.

“So I want taxes on working people lower, but it has to be affordable.”

Jeremy Hunt told Phillips that the autumn statement will focus on business growth and will remove the “barriers that stop businesses growing.”

He admitted on Sky News that the tax burden is “too high” and they want to bring this down which is “essential to growth.

The Chancellor added, “I think it is important for a productive, dynamic, fizzing economy that you motivate people to do the work [and] take the risks that we need.”

The head of the Institute for Fiscal Studies, Paul Johnson, warned there’s “no headroom there at all” for the Chancellor to introduce major tax cuts due to the state of public finances.

The Chancellor said, the autumn statement will be about “growth” and for the country and businesses “to turn a corner.”

Hunt added, “If we are going to embrace those opportunities we need to remove the barriers that stop businesses growing and that’s why this autumn statement will be focused on growth.”

Johnson told Phillips that for the Treasury there has been “some good news” dur to tax revenues being “more strong.”

The head of the IFS added, “At the budget back in March [debt was forecast to be] falling by £6bn in five years.

“Now, £6bn in five years out of a £1tn budget is nil. I mean, there is no headroom there at all… and that’s probably roughly where he’s going to be still [on Wednesday].”

Johnson said that the Chancellor “can always find a few billion in a budget or an autumn statement if they want to,” but he cautioned public finance are “in such a mess.”

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